Free vs Paid Software for Marketplace Development

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Choose the Best Plan for Marketplace Development

Free vs Paid Marketplace Software

  • Read about the pros and cons of free vs paid software.
  • Depending on the stage your business is at, the best type of marketplace software will differ.

Free, open-source software and paid software are both viable options for an eMarketplace platform.

But which is better for your company? What are the benefits and drawbacks of using free software versus partnering with a custom development software team? And what if your needs change?

Uses of Free or Low-Cost eCommerce Platforms

If Your Business Is Just Getting Started

  • Start-ups may benefit from a free software.
  • Free software often has limited capability.

A free or low-cost software may be a good place to start if the business is just getting started.

There may not be any proven cash flow, working capital, or investment capital to implement a specific solution for the marketplace. In which case, it probably makes sense to consider using an off-the-shelf, open source, free, or low cost solution.

This type of software has pros and cons based on how it is typically used and developed.

Free software tends to be associated with open source projects worked on by volunteers. Free software is also often for commercial support and custom development through the company that made it, and possibly a network of partners.

Oftentimes, there are limited capabilities within the software, which will be discussed.

Determine Your Needs and Plan Accordingly

If You’re at Mid to Enterprise Level

  • Mid-Sized & Enterprises need specific features.
  • It’s best to determine your needs first, then decide which software best fulfills those needs.

On the other hand, eCommerce marketplace software at the mid to enterprise level is specialized. Certain workflows are necessary for the business’s operations, so you may need more specific features in your platform.

If you know what your workflows need to be over time and the precise details of how your business is going to operate at scale, then you’ll want to go through a discovery process.

During which, you’ll put together a comparison matrix of features and capabilities that your business will need in the short, mid, and long terms.

From there, you’ll identify where free software capabilities overlap with your needs, and where they don’t.

Limitations of Free Software

Consider Long-Term Marketplace Development Costs

  • Free marketplace software is limited in functionality.
  • You can modify open-source software as needed, but this may cost more in the long run.

One of the major pitfalls of using free eMarketplace software is that the functionality may not meet all your needs to operate your business. Free or open source software is often more limited in its capacity.

This can be deceptive because much of the functionality is there and it’s open-source, so you might feel that you should be able to finish this one piece or do this one area of work to complete the implementation for your short-term and mid-term business needs.

However, making these modifications to free and open source software will have a major impact on the overall cost. In addition, it’s going to have a dramatic impact on the long-term needs of your business, and how much effort it takes to maintain.

Analogy for Free Software Implementation

Analogy for Free Software Implementation

For instance, imagine starting a business that’s going to be doing precision mining. You know you’ll need dump trucks that can haul rough-grade material in and out of a sandy area.

Then, you find out that someone you know has recommended a free truck that you can use to get started.

Well, the benefit of the truck is that it’s free. It may not be able to carry a lot, but it’s free. You can even add some plates to the side to carry some more load. You can also operate the truck immediately.

Structurally, though, the free truck is not really made to be a mining dump truck. It’s not made to carry destructive material or dump the material easily.

The shocks aren’t made to handle the load when it gets dumped in, so you have to dump small amounts in at a time instead of everything at once.

The concept here is that if you start with something that isn’t tailored to where your business is going, you can end up putting a lot more effort into getting that thing to work.

Therefore, consider looking into what the features are that your business, marketplace, customers, and vendors need for the short, mid, and long term. Then you can determine if an off-the-shelf open source or free software is going to meet those needs.

There aren’t that many out there that can operate at any major scale with custom or advanced functionality, so this is a pretty straightforward exercise. We invite the opportunity to help you with that, too.

Operate Your Business with Confidence

Pros of Custom Marketplace Software

  • A customized marketplace software will provide everything you need to operate your business from the start.
  • Partnering with a development team means you won’t waste time or energy getting the software to work.

On the other end of the spectrum, there’s custom tailored software that operates in the mid to enterprise market, and in the well-capitalized startup space with a specific niche and business model.

You can bring these types of scenarios to our Clarity enterprise eCommerce marketplace, and we can help you identify the features and functionalities that we’ve already built.

When thinking about the mining truck analogy, our truck won’t be the free one, but it will be equipped to handle everything you want to use it for.

We specialize in building these robust, customized B2B solutions that focus on operating at scale and providing self-service features.

This is the difference between an open source or free software and partnering with a development team.

The free software will give you immediate functionality without having to spend a lot. However, it may severely limit your capabilities and you may become dependent on patching up and adjusting the software enough to work for you.

You may end up spending more in the mid to long term, even within 6 to 12 months or 12 to 24 month range, than you would have if you’d gone with the specialized software from the beginning.

Plus, if you start out with a more robust, customized eMarketplace platform, then you can use all the functionalities your business needs right from the start.

working with a development team
Free Software vs Developer Partnership: Pros and Cons

Working with a Development Team

  • A development team can best help you determine what software best fits your business at each stage.
  • Make sure you can deliver value to your clients, no matter what marketplace software you choose.

A key step for marketplace businesses is completing a detailed discovery and planning session with experts, who have successfully worked on similar projects or business models.

Whether you’re working with Clarity Ventures and going through our discovery process, or working with a third party developer and technical analysis expert, it’s best to get a blueprint of what type of builder you need.

Plan Ahead for Successful Marketplace Development

To give an analogy, can you go with a manufactured home that you can build on, or do you need to build a custom home?

In many cases, a manufactured home, a prefab home, an RV, etc., might work well to get the business started. So, this may be an appropriate first step.

However, we encourage you to understand what the limitations are of the free software you’re getting. You might think you’re not paying for it, but you actually are as a business because a lot of the costs and benefits for a business is opportunity costs and sunk costs.

The fallacy there can be that you end up thinking you’re saving a lot by using something that’s an inferior starting point.

The features can be so sparse and incomplete that the amount of time it takes you to get started from having to complete the functionality of the free software can be more expensive and damaging to your business.

This is even more true if the incompleteness of the B2B marketplace software doesn’t just cost efficiency from the inside, but when interacting with the client, too. Not being able to successfully deliver for you clients can cost you your entire business.

So the question you need to ask is, is it going to cost more to complete what’s missing than it would to go with something that has all the features you need and allows you to focus on operating the business?

Plan Ahead for Successful Marketplace Development

To that point, it’s beneficial to be able to focus on the business operations, including marketing, sales, bringing additional vendors to the marketplace, the governance, workflows, and how to best implement these in your niche.

This is more difficult to do if you are stuck with a less-than-ideal software by trying to save a few dollars a month, potentially, on the software front.

But this is something that depends on where your business is in the life cycle and what your particular needs are.

For some eMarketplaces, there’s no issue with using an open source or free software. It may end up being a great first step.

We just encourage you to keep in mind there can be major pitfalls. You might consider talking with experts to do the analysis instead of assuming that if it’s free, it’s the best route to go.

Meet with Our Expert Development Team

We hope that was helpful and we encourage you to reach out to our team of experts. We're happy to meet with you complimentary to discuss this and other related topics for your upcoming enterprise eCommerce marketplace project.